An interesting interview with Harvard Business School Professor Michel Anteby (Harvard Business School Working Knowledge) tackles the interesting issue of “moral gray zones” — areas where workers and managers break or bend rules.  Anteby recently published a book on the subject.   

As has been written often in this space,  innovation is about breaking the rules. Innovation leaders invest huge effort in teaching colleagues how first to identify the rules (mostly they are unwritten, and concern technology and business models), and second, how to become willing, even eager, to break them. 

Most companies have ethical codes. For example, Israel’s Elbit, a defense contractor, has a strict set of rules regarding employment of family relatives, which are crystal clear and strictly implemented (Nepotism is not uncommon in many Israeli firms).   Elbit also has strict rules regarding giving and accepting presents from clients (a highly common practice in the defense industry, where subcontractors and  government officials offer, or love, such presents, in many countries).

How then, can companies, on the one hand, teach everyone to break the rules, in one realm (innovation) and in another, ethics, to strictly observe them?

Civil engineers teach us that a structure that is too rigid will collapse under stress.  Earthquake-proof structures have the ability to sway and vibrate without being destroyed, thus absorbing and dissipating earthquake energy harmlessly. Ethics may be the same, Anteby writes;  “… to date I have not found a single person unable to articulate in his or her work context a moral gray zone.” Rigid rules, like rigid buildings, end up being broken. 

Just as with innovation, where some rules must be observed and others disregarded or smashed, so with ethics,  some rules must have the flexibility to permit intelligent workers and managers the freedom of ethical choice. Without this flexibility, chances are the rules will ultimately evaporate. 

Moral philosophers teach that there are two main schools of thought in ethics:  utilitarianism (judge an action by its consequences), and (an awful name) deontological intuitionism (ethical rules are intuitive and obvious, write them down and keep them).

Good companies combine these approaches.  Rules without exceptions tend to create impossible dilemmas.   

Companies that are straight and moral tend to have a culture that makes ethics vitally important. It is this culture, rather than long lists of rules, that keeps companies honest. Without this culture, rules will be of no use. With it, rules become much less necessary.

*Moral Gray Zones: Side Productions, Identity, and Regulation in an Aeronautic Plant (Princeton University Press 2009)